Federal Government announces $1.9 billion energy fund for ARENA and next generation energy technologies

Scott Morrison and Angus Taylor announce $1.9 billion in funding for energy initiatives

The Morrison Government is investing in new and emerging technologies that will support jobs, strengthen our economy and reduce emissions – with a $1.9 billion package announced on Thursday, 17 September, 2020. ¹ The Prime Minister said the Government is supporting the next generation of energy technologies with the bulk of that funding ($1.62 billion) earmarked for the Australian Renewable Energy Agency (ARENA) with the view to further invest and expand the focus of ARENA and the Clean Energy Finance Corporation (CEFC) to back new technologies that will cut emissions in agriculture, manufacturing, industry and transport.

Prime Minister Scott Morrison said the $1.9 billion investment package in future technologies to lower emissions would back jobs now and into the future, cut costs for households and improve the reliability of our energy supply.

The range of energy initiatives covered by this injection of much needed investment, includes:

Australia is in the midst of a world-leading boom in renewable energy with over $30 billion invested since 2017. Solar panels and wind farms are now clearly commercially viable and have graduated from the need for government subsidies and the market has stepped up to invest.

Minister for Energy and Emissions Reduction Angus Taylor said getting the next generation of energy technologies right would not only help to keep prices low and the lights on, but would importantly grow jobs, strengthen the economy and reduce emissions.

“We will reduce the cost of new and emerging technologies, not raise the cost of existing technologies or layer in new costs to consumers and businesses through mandated targets or subsidies,” Minister Taylor said.

The most significant measure is $1.62 billion in funding for ARENA, as this funding was essential for ARENA’s continued operation. The mandate of ARENA has also been expanded from just renewable energy to also cover technologies such as energy efficiency, hydrogen and carbon capture and storage. What specific priorities ARENA will have on energy management is unclear, and will likely be developed over the next 6-12 months.

“ARENA has played an important role in this growth, and as the cost of renewable technologies has fallen dramatically, the Government is investing in the future of ARENA to support the next generation of energy technologies.”¹

According to a media statement, the Government’s emissions reduction strategy is focused on technology not taxes. An approach that doesn’t compromise energy affordability or reliability will be more important than ever as we recover from the COVID-19 pandemic.

The other funding measures are modest but welcome – especially the funding for energy efficiency grants and for the continuation of low-cost but high-impact measures such as the NABERS rating program for buildings.

The Energy Efficiency Council’s CEO, Luke Menzel, has played a pivotal role in advocating for further funding for ARENA and expansion of its role. The Technology Co-investment fund is also likely to be an outcome of the joint advocacy by the EEC and a range of well-respected organisations, who have been advocating for funding for energy management in businesses and households.²

Ecosave’s Group Managing Director, Robin Archibald, said

Energy efficiency and smart demand management are emerging as a critical path towards a net zero future. The government’s funding is a huge step in the right direction, however, there are still significant opportunities for governments to reduce their carbon footprint, achieve operational cost savings and create jobs through increased investment in energy efficiency.

The Energy Efficiency Council (EEC) also believes that energy efficiency could play a far more significant role in creating jobs and stimulating Australia’s economy. As noted earlier this year, the International Monetary Fund (IMF) and the International Energy Agency (IEA) recommend that governments invest in energy efficiency as it is the MOST jobs-rich field, far ahead of traditional sources of energy.²

Construction and manufacturing jobs created per million dollars of capital investment

Sustainable Recovery Plan; Energy fund ing creates more jobs

Image Source: https://www.iea.org/reports/sustainable-recovery/evaluation-of-possible-recovery-measures#abstract

Accordingly, the EEC will continue to advocate for the Australian, state and territory governments to build on last week’s announcement and make significant commitments to invest in upgrading schools, hospitals and public housing, helping manufacturers to cut their energy bills; and supporting households and businesses to save energy in their buildings.

Put simply, energy efficiency is a jobs machine. It is time to start it up.²

¹ Prime Minister of Australia, Investment in New Energy Technologies, Media Release 17 Sep 2020
² Energy Efficiency Council Member Alert, 17 Sep 2020

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